Trademark Disputes Between Identified Parties Concerning Rights In Personam Are Arbitrable: Bombay High Court
|The Bench noted that a government school registration cannot revive a trademark licence that expired under the franchise agreement.
The Bombay High Court has held that a dispute over the use of a trademark does not fall outside an arbitration agreement merely because a registered mark is involved, reiterating that trademark disputes between identified parties, arising from a contractual relationship such as a licence, and concerning rights in personam rather than rights binding the world at large, remain arbitrable.
Applying this principle while passing interim orders in a Section 9 arbitration petition filed by ZEE Learn Limited, the owner of the "KIDZEE" preschool brand, the Court restrained its former Koderma franchisee from using the mark "KIDZEE" or the closely resembling name "KIDGEE," rejecting her defence that a UDISE registration obtained from the Jharkhand education authorities entitled her to continue running the school under the new name, since statutory recognition and contractual obligation operate in separate fields.
A Bench of Justice Amit Borkar while hearing a Commercial Arbitration Petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs pending arbitral proceedings arising from a Kidzee Franchise Agreement, observed, “...There may be matters concerning registration of a trademark or rights operating against the whole world which may stand on a different footing. However, the present dispute does not require cancellation or registration of any trademark. The dispute concerns the right of this particular Respondent, after expiry of the franchise, to use the Petitioner's mark or a similar mark in the context of the contractual relationship between the parties. That right arises from the earlier licence and from the obligations undertaken under the Franchise Agreement. Therefore, the dispute concerns rights and obligations between these parties. In paragraph 13 of K. Mangayarkarasi, while referring to Vidya Drolia, the Supreme Court observed that grant of patents and registration of trademarks are matters having erga omnes effect. However, disputes between identified parties concerning rights in personam may still be arbitrable. This distinction is relevant here. The present Petition is against the Respondent. The Petitioner is not seeking any alteration in the Register of Trade Marks or a declaration which will bind every person”.
Advocate Rashmin Khandekar appeared for the petitioner and Advocate R. C. Mishra appeared for the respondent.
The petitioner had granted the respondent a franchise in January 2014 to operate a "Kidzee Centre" at Bisunpur, Koderma, Jharkhand, for six years. The agreement expired on 20 January 2020. The petitioner alleged that the respondent continued using "KIDZEE" thereafter and, upon being confronted, began operating under the near-identical name "KIDGEE," despite a legal notice, an FIR, and public clarificatory notices issued in newspapers. The respondent contended that she had stopped using "KIDZEE" after 2022, obtained government recognition to run "KIDGEE School" through a foundation, and that "KID" was a generic word incapable of monopoly.
Procedurally, the petitioner had lodged an FIR against the respondent, who in turn filed a cross-FIR and an anticipatory bail application before the Jharkhand High Court, where she had claimed to be running the school under a different name after completing due formalities.
Rejecting the respondent's objection that the dispute involved independent statutory trademark rights outside the arbitration clause, the Court held that the assumption that all trademark matters are outside the scope of arbitration is erroneous, and that disputes arising from subordinate rights such as a licence granted by the proprietor of a mark remain arbitrable as they concern rights and obligations between the parties to that licence. Since the petitioner sought no declaration binding the world at large but only enforcement of obligations owed by this particular respondent under the franchise, the claim was one in personam and squarely covered by the widely worded arbitration clause, the Court held, relying on the Supreme Court's rulings in K. Mangayarkarasi v. N.J. Sundaresan (2025) 8 SCC 299, Vidya Drolia & Ors. v. Durga Trading Corporation (2021) 2 SCC 1, and Renusagar Power Co. Ltd. v. General Electric Co., (1984) 4 SCC 679.
“The statutory or administrative permission and the contractual obligation operate in different fields. Even if it is assumed that the Government of Jharkhand permitted the Respondent to run a school under the name "KIDGEE School", such permission cannot change Clause 14.4 of the Franchise Agreement. It cannot bring back the licence which had expired under the Agreement”, the Bench noted.
The Court, however, declined the more drastic reliefs sought, a bank guarantee of Rs. 7,85,56,728/- and appointment of a Court Receiver, holding that quantification of liability must await arbitration, and that preservation and disclosure of financial records would adequately protect the petitioner meanwhile.
Accordingly, the Court restrained the respondent from using "KIDZEE" or "KIDGEE" or any deceptively similar mark, directed removal of such marks from the school's premises and material, and directed the respondent to file a disclosure affidavit within four weeks, while leaving all monetary claims open for the Arbitral Tribunal.
Cause Title: ZEE Learn Limited v. Beauty Singh, Comm Arbitration Petition (L) No. 20863 of 2026
Appearances:
Petitioner: Rashmin Khandekar, Anand Mohan, Umang Mehta, Trisha George, Avyaan Legal, Advocates.
Respondent: R. C. Mishra, Advocate.